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Malta: CRS developments

11 July 2017

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Salomone Vella
Mark Galea Salomone Donald Vella

The guidelines issued in relation to the implementation of EU Council Directive 2014/107/EU of December 9 2014 amending Directive 2011/16/EU as regards to mandatory automatic exchange of information in the field of taxation (DAC2) in Malta and the common reporting standard (CRS) were amended on April 7 2017. Specifically with respect to trusts, the Commissioner for Revenue has introduced clarifications to the guidelines, which the Inland Revenue Department (IRD) has deemed necessary for the purposes of a more correct application of the regulations.

By way of background, the qualification of a trust as a reportable Malta financial institution (RMFI) depends heavily on whether the trust is defined as an investment entity. A trust is deemed to be a RMFI if the trustee is Malta-resident, and it does not qualify as a non-reporting financial institution, that is, where the trustee is a RMFI and reports all information that is required to be reported with respect to all reportable accounts. Once classified as a RMFI, the trust or its trustee has an obligation to report to the IRD.

RMFIs are obliged to register with the IRD within 30 days following the date on which the entity was classified as a RMFI. The Commissioner for Revenue has also been vested with the power to require Maltese trustees to report on a yearly basis (from 2016) the following information on the trusts for which they act as trustee: (i) the name of the trust, (ii) the date of its creation, (iii) the date when it first had a trustee that was resident in Malta, and (iv) the date of its termination (where applicable). Failure of a trustee to register the trusts within 30 days of the lapse of the deadline for reporting will result in the trustee having an obligation to register all its trusts for the purposes of the regulations.

The updated guidelines have clarified that:

  • Consolidated reporting by trustees will only be supported through the upload of the CRS XML data file using the IRD Secure File Transfer Protocol (SFTP) server. Trustees that wish to use this service must apply to the Commissioner for Revenue;
  • With respect to investment entities managed by a professional corporate trustee, the CRS guidelines clarify that an entity that is dedicated to the investment, management or administration of the wealth of a limited number of shareholders or of related shareholders and is managed by a reporting financial institution that is duly registered for CRS purposes, is to not be considered an investment entity but a non-financial entity. The non-financial entity is to be classified as a passive non-financial entity in order to ensure proper disclosure for CRS purposes; and
  • Trusts that have no reportable accounts and trusts, which are deemed to be non-reporting financial institutions where the trustee itself is a RMFI, do not need to register with the Commissioner for Revenue for the purposes of CRS.

It is pertinent to note that any reporting to the IRD in terms of CRS would have needed to be done by June 30 2017.

Mark Galea Salomone ( and Donald Vella
Camilleri Preziosi
Tel: +356 21238989

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